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| British retail sales slide amid budget uncertainty and wait for Black Friday | |
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| Sales volume in Great Britain fell for first time in three months, down 0.7% in October as people delayed spending | |
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| Retail sales in Great Britain fell for the first time in three months in October, as uncertainty surrounding Labour first budget in 14 years and the lure of Black Friday bargains delayed consumer spending. | |
| Reporting on the first month of the “golden quarter” for retailers ahead of the Christmas rush, the Office for National Statistics (ONS) said sales fell by 0.7% month on month in October – and revised down the growth figure for September from 0.3% to just 0.1%. | |
| Analysts said rising household incomes following a period of strong wages growth and low inflation since the beginning of the year was likely to see an improved outlook for retail after the dust had settled from the budget. | |
| The chancellor, Rachel Reeves, had warned the public to be braced for tax increases in the budget on 30 October, but it was businesses that were particularly hit. Retailers said the rise in the rate of employers’ national insurance contributions would add £7bn to their costs. | The chancellor, Rachel Reeves, had warned the public to be braced for tax increases in the budget on 30 October, but it was businesses that were particularly hit. Retailers said the rise in the rate of employers’ national insurance contributions would add £7bn to their costs. |
| Clothing stores in particular bore the brunt of consumers tightening the purse strings last month, partially offset by the growing trend for cosmetic advent calendars that can cost from £60 to £650. | |
| The ONS said that on a quarterly basis – a better guide to the underlying trend than a single month’s figures – sales volumes rose 0.8% in the three months to the end of October compared with the previous quarter. In the year to October 2024, sales volumes were up 2.4%. | The ONS said that on a quarterly basis – a better guide to the underlying trend than a single month’s figures – sales volumes rose 0.8% in the three months to the end of October compared with the previous quarter. In the year to October 2024, sales volumes were up 2.4%. |
| “Retail sales fell back in October following three months of growth,” said Hannah Finselbach, a senior statistician at the ONS. “The fall was driven by a notably poor month for clothing stores, but retailers across the board reported consumers held back on spending ahead of the budget.” | “Retail sales fell back in October following three months of growth,” said Hannah Finselbach, a senior statistician at the ONS. “The fall was driven by a notably poor month for clothing stores, but retailers across the board reported consumers held back on spending ahead of the budget.” |
| Sales at clothing and footwear stores fell 3.1% in October, the largest decline of any category, with other non-food store sales down 1.4%. | Sales at clothing and footwear stores fell 3.1% in October, the largest decline of any category, with other non-food store sales down 1.4%. |
| The ONS said previous growth clothing sales in recent months was fuelled by end of season sales and good weather enticing consumers to shop. | The ONS said previous growth clothing sales in recent months was fuelled by end of season sales and good weather enticing consumers to shop. |
| Non-food stores – a combination of department stores, clothing, household and other non-food stores retailers – fell by 1.4%. Sales at supermarkets and food stores decreased by 0.6%. | Non-food stores – a combination of department stores, clothing, household and other non-food stores retailers – fell by 1.4%. Sales at supermarkets and food stores decreased by 0.6%. |
| Kris Hamer, the director of insight at the British Retail Consortium, said: “While October produced a positive start to the ‘golden quarter’, with year-on-year growth for the fourth month in a row, there was a monthly decline due to pre-budget jitters from households.” | |
| He said fashion took the brunt of this hit after milder weather last month put off winter purchases. | |
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| The weaker-than-expected overall retail sales figures sent the pound to a six-month low against the US dollar. Sterling fell as low as $1.255, its weakest level since May, extending recent losses as economic worries have risen. | |
| “A fall in sales in October does not bode well for the retail industry, as this month typically marks the start of the festive shopping season,” said Greg Zakowicz, a senior e-commerce expert at Omnisend. | |
| The only sectors where sales grew were household goods, a rise of 0.1%, and fuel sales, an increase of 0.6%. | |
| Black Friday could prove to be a bigger event than in recent years as bargain hunters continue to upgrade their technology. | |
| Asif Aziz, the retail director at the mobile phone operator EE, said: “October has been a quiet month on the high street with shoppers clearly keeping their powder dry ahead of Black Friday sales. “Uncertainty around the budget will have also fostered a save now, spend tomorrow mindset, as consumers start to factor in increased expenditure in the run-up to Christmas.” |